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Turbo tax error with Federal Tax Table

Forum|Forum|1 year ago
April 4, 2025
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At least for MFJ, the value from IRS tax table and TT amount is about $18 different.

Example #1: Form 1040, Line 15 taxable income = $68,220. IRS tax table gives the tax amount as $7,723 for MFJ with income between $68,200 to $68,250. However TT give a tax amount of $7,705.

Example #2: Line 15 taxable income= $85,682; tax table amount= $9,817 for MFJ. But TT tax amount is $9,799 instead.

I anticipated hearing from the IRS for not paying enough tax because of this.

TurboTax Home & Biz Windows

Best answer by mesquitebean

First, I'd say your custom tables you provided above are nice and took some work!

TurboTax doesn't always use just the IRS Tax Tables to calculate the tax shown on Line 16. There are several calculation methods, depending on specific situations in your return. For instance, did you have any capital gains or qualified dividends? If so, then TurboTax would use the Qualified Dividends and Capital Gains Tax Worksheet to make the calculation. That can frequently result in less tax owed.

First, here's how to find out the method(s) that TurboTax used to calculate your tax. Go into Forms Mode. Close to the top of the forms list is the 1040 Worksheet (1040 Wks). Open that worksheet, and scroll way down to between Lines 15 and 16. You should see an interposed Tax Smart Worksheet. What method(s) does it show that TurboTax used?

If you DID have any capital gains or qualified dividends, while in Forms Mode you can also review the Qualified Dividends and Capital Gain Tax Worksheet, which in the forms list is abbreviated as qual div/cap gain (or similar). It would show how the calculation is done on that worksheet, if applicable.

When you provide the additional info, it will be easier for someone to comment.

M

mesquitebeanAnswer

Employee

First, I'd say your custom tables you provided above are nice and took some work!

TurboTax doesn't always use just the IRS Tax Tables to calculate the tax shown on Line 16. There are several calculation methods, depending on specific situations in your return. For instance, did you have any capital gains or qualified dividends? If so, then TurboTax would use the Qualified Dividends and Capital Gains Tax Worksheet to make the calculation. That can frequently result in less tax owed.

First, here's how to find out the method(s) that TurboTax used to calculate your tax. Go into Forms Mode. Close to the top of the forms list is the 1040 Worksheet (1040 Wks). Open that worksheet, and scroll way down to between Lines 15 and 16. You should see an interposed Tax Smart Worksheet. What method(s) does it show that TurboTax used?

If you DID have any capital gains or qualified dividends, while in Forms Mode you can also review the Qualified Dividends and Capital Gain Tax Worksheet, which in the forms list is abbreviated as qual div/cap gain (or similar). It would show how the calculation is done on that worksheet, if applicable.

When you provide the additional info, it will be easier for someone to comment.

B

BlockBusterAuthor

My mistake. I went back and see that I need to use the Qualified Dividends and Capital Gain Tax worksheet, picking the smaller of line 23 or line 24, for the tax amount.